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Human Freedom Index 2018

Via: Luis Pablo De La Horra

Human Freedom Index 2018

Cato Institute’s scholars Tanja Porčnik and Ian Vásquez have recently released the 2018 Human Freedom Index (HFI), a report where the authors look at freedom in the world using data from 2016. The HFI ranks countries from most to least free after analyzing 79 indicators related to personal and economic freedom. Here are five graphs that summarize the report’s main takeaways.

The link between personal and economic freedom

As shown in the graph below, personal and economic freedom are highly correlated: those countries with high economic freedom tend to rank high in terms of civil liberties. This is the case of New Zealand (3rd in EF; 6th in PF), Switzerland (4th in EF; 10th in PF) or Canada (10th in EF; 12th in PF).

Nonetheless, these results must be taken carefully. After all, correlation doesn’t imply causation. For example, Singapore ranks 2nd in economic freedom, but 62nd in personal freedom. Similarly, Argentina can be found in the first tercile regarding civil liberties, but ranks 160 out of 162 countries in terms of economic freedom.

There is no doubt that, under certain circumstances, economic freedom can lay the foundations for the establishment of a political system that respects personal and political liberties. Yet this relationship is far more complex than it appears on the surface.

How has freedom evolved since 2008?

The graph below shows the changes in each of the twelve categories that make up the HFI for the period 2008-2016. Mobility rights, religious freedom and rule of law experienced the most severe deterioration, with scores decreasing by between 6 and 8 percent. In contrast, sound money and regulation scores went up, although modestly.

In geographical terms, East Asia, South Asia and Sub-Saharan Africa are the only regions that improved their human freedom scores. In contrast, the Middle East and North Africa suffered the largest decline, moving from 6.34 in 2008 to 5.76 in 2016.

Women’s rights in the world

Of the 79 indicators used to assess the state of freedom in the world, seven are women-specific: female genital mutilation, missing women, equal inheritance rights, women’s freedom of movement, parental rights, female-to-female relationships, and divorce. The following graph averages these seven indicators to give an overview of women’s rights by region:

The most underdeveloped regions in this respect are South Asia, Sub-Saharan Africa, and Middle East and North Africa. This last region has witnessed a severe decline in women’s rights since 2015.

Human freedom and economic growth

How does freedom relate to economic growth? The graph on the left shows how human freedom, which combines indicators measuring economic and personal freedom, correlates with income. The right-hand graph divides countries in quartiles according to their degree of human freedom and relates it to income per capita. Both graphs suggest that human freedom and economic growth are positively related.

As pointed out above, we must be careful not to confuse correlation with causation. Yet, in this case, it is not very difficult to establish a causal link between freedom and increasing living standards. As shown by Daron Acemoglu and James A. Robinson in their bestseller Why Nations Fail, countries with inclusive political and economic institutions (e.g., the rule of law or private property rights) have historically outperformed countries lacking them.

Since inclusive institutions are those that best protect and promote economic and personal freedom, it doesn’t seem far-fetched to argue that human freedom leads to more prosperous societies.

Democracy and freedom

The last graph relates human freedom with political freedom. Unsurprisingly, the correlation is very high. After all, personal and political freedom are two sides of the same coin: the latter is just a logical corollary of the former.

Nonetheless, it would be interesting to isolate the two main components of human freedom (personal and economic) and find out how each of them correlates with political freedom. I suspect correlation would be higher in the case of personal freedom as it is easier to imagine an authoritarian country with relatively-high degrees of economic freedom (e.g., Chile under Pinochet) than a country that somehow respects personal liberties while suppressing political ones.